The tax revision package President Carter plans to send Congress next January will be a sharply pared version of his present proposal - possibly without the key provision to end special tax treatment of capital gains.
Although officials stress that no firm decisions have been made yet, sources familiar with the program concede the President's announcement that he is postponing the "reform" proposal carries with it just that implication.
"There's no doubt the scope of the package is going to have to be cut radically under this approach," said one key adviser involved in the discussions. "A lot of the big items simply will have to be put off."
Sources say the strategy now will be to split the proposal into two - with one part earmarked for consideration in 1978, and a second portion to be taken up in 1979. The major question is, will the 1979 segment ever pass?
The shift is in line with the latest leanings of White House planners, who have been under pressure from key congressional leaders to trim the tax package to something Congress can more easily digest.
Rep. Al Ullman (D-Ore.) chairman of the House Ways and Means Committee, and Sen. Russell B. Long (D-La.), chairman of the Senate Finance Committee, have been urging the President to moeve more slowly on the package.
Sources say the measure the President proposes in January will be limited almost entirely to the tax cuts he thinks are necessary for individuals and business, and a few modest revisions designed to simplify the code.
But the major restructuring of the present system envisioned in the Treasury's widely publicized Sept. 2 memos will be left for 1979 and beyond if it ever fully emerges at all.
"How comprehensive the 1979 proposal will be depands on a variety of factors, such as what kind of Congress we have then," one planner said. If conditions don't change much by then, he implied, that package may be small as well.
While it's still far from official, sources say the January package almost surely will include the tax rate cuts the President was planning, the conversion of some deductions to credits, and an end to some other writeoffs.
Ironically, the most likely candidate for postponement until 1979 is the centerpiece of the new Carter package - the proposal to end special treatment of capital gains, the profits from the sale of stocks or other assets.
Currently, only half a capital gain is subject to tax. Carter pledged during the 1976 campaign to eliminate that distinction and tax capital gains as ordinary income. The promise has been a rallying cry of tax reformers.
Tax experts conceded that the January package almost certainly will not seek to impose a tax on capital gains at death - a move the administration had been considering but now considers too risky in view of Congress' opposition.
If the administration makes any move to chip at the capital gains break, officials say it most likely will be to propose narrowing the number of categories that qualify for such treatment, a modest gesture by any measure.
At the same time, planners admit that if Carter can't bring in new revenues by ending the special breaks for capital gains, he can't accomplish another major goal - to reduce the maximum tax rate for individuals to 50 per cent.
Still unclear is how other key Carter "reform" proposals would be affected by the cutbacks.
Another candidate for postponement is the move to reduce the "double taxation" or corporate dividends. But Carter may have to leave it in. Congressional leaders like it and want it enacted.
The administration also could put off proposals to trim existing export subsidies and tax breaks for multinational companies. The Treasury Secretary already is urging caution on these, but Carter is strongly for them.
One unresolved question is how the cut-and-split operation would affect prospects for passage of the overall Carter proposals. Analysts are split over this issue. Some see no difference, while other fear the urgency is gone.
And there are differences over its likely impact on the budget. Some say that, depending on how tax planners juggle the proposals, the more could give Carter a bit more budgetary leeway to push through added stimulus in 1978.
In any case, the immediate assessment appears to be that the split will improve chances for enactment of the January portion of the tax package, but may dim prospects for the rest of the proposal.
As a result, the administration's tax revision program is not less uncertain than it was a day ago. The uncertainty just is spread over a longer period of time.